Cattle Outlook: Cattle Prices Lower on Heavy Sales Volume

US - USDA says there were 469 million pounds of beef in cold storage at the end of July, write Ron Plain and Scott Brown, Ag Economics, MU.
calendar icon 30 August 2016
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That is up 2.8 per cent from the month before and up 2.0 per cent from the same date last year. This is the most beef in storage for any month since February and the most for any July since 2006.

USDA's August Cattle on Feed report said the number of cattle on feed on August 1 was the most for any August since 2012. July placements were up 1.6 per cent and included a lot of heavy cattle. The calculated average weight for cattle placed on feed has consistently been above the year-ago level for the last 24 months.

Last week fed cattle prices were lower in heavy sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $114.81/cwt, down $2.73 from the previous week's average and down $28.59 from a year ago. The 5-area dressed steer price averaged $180.38/cwt, down $5.68 from the week before and down $46.59 from a year ago.

Beef cutout value was mixed last week. On Friday morning, the choice boxed beef cutout value was $199.73/cwt, down 42 cents from the previous Friday. The select carcass cutout this morning was $194.03/cwt, up 3 cents from last week.

Last week's cattle slaughter totalled 600,000 head, up 1,000 head or 0.2 per cent from last week and up 8.5 per cent from a year ago. Year-to-date cattle slaughter is up 4.2 per cent and beef production is up 4.6 per cent.

The average steer dressed weight for the week ending on August 13 was 887 pounds, up 1 pound from the week before, down 13 pounds from a year ago, and below the year-ago level for the 15th week in a row.

USDA's weekly crop progress report said that 18 per cent of US pastures were in poor or very poor condition on August 21. That is up 1 point from the week before and up 2 points from a year ago.

Feeder cattle prices were $4 to $6 lower and stocker calf prices were steady this week at Oklahoma City.

Cattle futures were lower last week. The August live cattle futures contract settled at $110.35/cwt today, down $3.20 for the week. October fed cattle settled at $106.35/cwt, down $3.90 from the previous Friday. December fed cattle futures settled at $108.10/cwt.

September feeder cattle futures ended the week at $139.92/cwt, down $3.93 from a week earlier. October feeder cattle lost $5.25 last week to settle at $135.95/cwt. November feeder cattle futures closed the week down $5.15 at $132.82/cwt.

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